This Government is committed to supporting parents with the cost of childcare. We’ve doubled free childcare to 30 hours a week and introduced Tax-Free Childcare. This support is fairer than the employer voucher scheme, as for the first time it is available to self-employed parents, and all qualifying working parents regardless of their employer. It is better targeted as the support is based on a per child basis, rather than a per parent basis.
The Government opened the childcare service in April of this year – one site where parents can apply for both 30 hours free childcare and Tax-Free Childcare through an easy-to-use, single digital application. This avoids the need for parents to provide the same information twice and means that many parents receive an eligibility result in real time.
More than 275,000 parents now have an open childcare account. Of these, over 216,000 parents received an eligibility code for 30 hours free childcare in September.
However, HMRC recognise that over the summer some parents didn’t receive the intended level of service whilst using the site. Whilst the majority of parents used the childcare service without significant problems, some parents experienced technical issues including delayed decisions about their eligibility for one or both of the schemes. The Government acted quickly to address this, and HMRC and their delivery partners NS&I have now made significant improvements to the service.
Over the coming months, we will gradually open the childcare service to parents of older children, whilst continuing to make further improvements to the system. This means we can manage the volume of applications going through the service, so parents continue to receive a better experience and prompt eligibility responses when they apply – almost all parents receive a response within five working days, and most get their decision instantly. All eligible parents will be able to apply by the end of March 2018.
On 24th November, we will open the service to parents whose youngest child is under 6 or who has their 6th birthday on that day. Parents can apply online through the childcare service which can be accessed via the Childcare Choices website: https://www.childcarechoices.gov.uk
Applications for Tax-Free Childcare accounts have been lower than expected. We want to encourage more parents to take up the offer they are entitled to and now the service has improved, we will undertake activity to raise awareness of Tax-Free Childcare amongst parents.
Tax-free Childcare is just one part of the support this Government offers for childcare costs. Where eligible, parents are able to access Working Tax Credits which covers 70% of childcare costs or Universal Credit which increases this support to 85% of costs, 15 free hours of childcare for disadvantaged 2 year olds, 15 free hours for all 3 and 4 year olds, and an additional 15 hours to working parents of 3 and 4 year olds. Employer Supported Childcare will also remain open to new entrants until April 2018.
This statement has also been made in the House of Lords